John Ivison: Expect Cabinet shuffle and election agenda as Harper gets set to switch back into constant campaign mode

Stephen Harper gets set to switch back into constant campaign mode

Politics is set to make a comeback in Ottawa this summer, with a Cabinet shuffle, followed in the fall by a prorogation of Parliament, a Throne Speech and a brand new pre-election agenda from the Conservative Party.

In minority government, the Tories knew they could be 36 days from an election at any given time. “Every single day was spent deciding which message to drive,” said one former senior Conservative insider. “Majority government is a different mode of operating – it is an opportunity to govern.”

Stephen Harper has spent the past two years focused on implementing his agenda – striking a free trade deal with Europe, reforming the public service, overhauling immigration, ensuring the sustainability of long-term programs like health transfers and Old Age Security and streamlining the review process for big resource projects.

But at some point he will switch back into constant campaign mode and all the signs suggest the reset button will be hit this summer.

Mr. Harper all but committed to a mid-term Cabinet shuffle on a radio show last summer and sources around Ottawa suggest Jim Flaherty, the Finance Minister, might be gone “sooner rather than later.”

Others like Public Safety Minister Vic Toews might decide they do not plan on running in 2015. Regardless, there is an almost universal belief in Ottawa that the current Cabinet is not the one that will fight the next election.

There are no policy areas more in need of fresh thinking than the axis of aboriginal affairs, natural resources and the environment, which are proving to be the Achilles heel of this government because they come together and hit the Conservatives where it hurts – on the economy.

Last year, Natural Resources Minister Joe Oliver breathed new life into the previously discredited environmental movement by tarring its adherents as “radicals” whose “ideological agenda threatens to hijack the regulatory system.”

He was, of course, quite right but by saying so, he allowed himself to be portrayed as a climate change denier intent on plundering the planet’s resources, no matter the cost to the environment.

This damage was compounded by ramming through the streamlining of approvals for new oil and mining projects in two juggernaut budget bills.

The result of the government overplaying its hand: First Nations joined forces with the environmentalists, Idle No More and a Conservative credibility gap on the environment that turned into a credibility chasm.

Fortunately, nothing in politics is as useful as a short memory. We are already seeing the emergence of a more sensitive government line on the environment. Mr Oliver was treading more softly when he was asked whether he stood by calling environmentalists “radicals” on CTV Question Period last week. “I think we’ve got to move beyond that,” he said.

The reason for the new humility is clear – Canada’s cash cow is in danger of drying up.

The concern just months ago was that Chinese state-owned companies were set to buy up Canada’s oilsands. The worry expressed this week by Canada’s excellent ambassador to China, Guy Saint-Jacques, is that the Chinese are growing dubious about the attractiveness of the oilsands for long-term investment. North American oil and gas capital spending is set to grow at the slowest pace in the world, according to Barclays Capital, as companies like Suncor question whether big projects like a proposed $11-billion upgrader justify the investment.

The problem is that pipelines to shift our hydrocarbons to market are full and the enviro/native opposition to new pipeline projects means a million barrels of crude oil a day risk being stranded in the ground. CIBC pegged the cost of Canada’s land-locked oil at $19-billion in 2012.

Global demand has never been higher but we’re selling our oil at close to a $50 discount to Brent Crude prices and $25 to the benchmark West Texas intermediate price.

That discount hits corporate profits, lowers tax revenues for governments and will chop up to 1.6% from GDP growth.

Major decisions on the Keystone XL pipeline (from the U.S. government) and the Northern Gateway proposal (from the National Energy Board) will be handed down this year. There are other proposals to flow crude through to Montreal and on to New Brunswick, not to mention the tripling of capacity of the Trans Mountain pipeline to Vancouver.

Failure to reach tidewater and secure world prices for Canada’s crude will put the brakes on oilsands expansion, making a mockery of Mr. Harper’s description of Canada as an “emerging energy superpower.”

If the environment and native politics are the Achilles heel of this government, then the glut of oil in North America is the Achilles heel of the economy.

To ensure they are in better shape on the ballot question of the economy in the run up to the 2015 election, the Conservatives are going to have to play a more adept political game. For example, if the federal government can repair the relationship with First Nations, settle more land claims in B.C. and make aboriginal Canadians genuine partners in the $650-billion in planned projects across the country, it may be able to decouple native groups interested in improving prosperity for the next generation from the environmental organizations that are opposed to resource development of any kind.

The key will be subtle changes in policy and language, not to mention fresh, energetic and imaginative leadership.

None of the rising stars in Cabinet will thank me for tossing their hats in the ring but a Jason Kenney or James Moore may need to be handed one of the career-limiting chalices to break the logjam.